‘Current positioning of natural gas as new resource pride for Nigeria will change dynamics for good’
by Frank Uzuegbunam
November 23, 2016 | 4:19 am| | | Start Conversation
Audrey Joe-Ezigbo is the Co-Founder/Executive Director, Falcon Corporation Limited, an indigenous mid-stream oil services operator that provides services in natural gas distribution, engineering, procurement and construction. She is also the 2nd Vice President, Nigerian Gas Association (NGA). On the sideline of the recent NGA conference, she spoke to Frank Uzuegbunam, Editor, West Africa Energy, on the new opportunities emerging from natural gas and its implication for driving renewed buoyancy in the economy. Excerpts:
The theme of this edition of NGA conference is “Nigerian Gas Roadmap and its Potential for Domestic, Regional and Global influence”. What is the relevance at this present time?
The theme addresses the pathway for the resolution of the existing challenges within the industry and the vast potential of natural gas for national and regional transformation. It is imperative for us to understand as a nation that every diversification agenda we put forward may not hold water unless we deal with the gas space. This is because the gas space is vital to dealing with our power issues, and power is central to the effective implementation and sustainability of any diversification initiative.
These are critical times for us as a nation, and regardless of other initiatives, we cannot lose sight of the reality that our gas industry has yet grossly untapped economic and developmental potentials for the country.
One of the critical issues canvassed at the conference is positioning gas as the new resource pride for Nigeria. How can we achieve that in a country that has focused on oil for over five decades?
The steep and sustained decline in global oil prices over the past two years has created a forced impetus for us to take deliberate steps to revisit the full commercialization of our gas resources. Government’s earnings have been grossly impacted and there is need to generate significant revenues from other sources. Gas provides a viable alternative.
Also, the nation is plagued with a major power crisis. Much as other sources of power generation are taking on a growing play, gas-to-power remains the most viable option for resolving our power challenges for the scale of generation that is required.
Between these twin challenges of diminished revenues and the power conundrum, we are left with no other choice than to direct our attention properly to this critical resource.
The recent release of the draft National Gas Policy is a signal that the nation is finally taking a bold step to create room for gas as a specific resource and as a distinct resource from oil. This is actually the only way forward.
As an association, what has NGA done to help reposition gas as the resource for Nigeria’s economic diversification?
From inception in 1999, NGA has consistently interfaced with government on policy issues and direction of the gas industry in Nigeria. We have had a very robust engagement with all stakeholders through our conferences, business fora and other programs. We are members of the International Gas Union (IGU) and are therefore positioned as the voice of Nigeria’s gas industry for the international markets, investors and partners alike.
We have been very active in terms of knowledge dissemination and capacity building in the industry through our publications, NGA Learning Solutions platforms and our Study Groups that are charged with the responsibility for specific areas of the industry.
Top on our list of priorities is advocacy. The NGA holds itself as the umbrella association of all professionals and businesses in the gas industry. We speak for the value chain, as robust as it is, making inputs into and influencing the formulation and driving of policy that will move the industry forward.
This is a particularly auspicious time for the NGA considering government’s release of the draft national gas policy for stakeholder consideration and input.
We will continue to champion the building of an increasingly vibrant and dynamic gas industry under the able leadership of our President, Engr. Dada Thomas.
Do you see Nigeria’s interest in natural gas fizzling out once the price of crude oil show sign of recovery?
No doubt, low crude oil prices are putting pressure on government and all the stakeholders in the energy landscape, not just in Nigeria but all over the world. This has come with a ripple effect which has shifted attention to gas as an integral part of the country’s energy mix.
Nigeria has been particularly hard hit with this current burst cycle in the oil prices and it is unthinkable that we would not take the very clear lessons from this experience.
Yes, a rebound in oil prices may provide some immediate term relief that has the potential to distract, but the extent of bashing our economy has taken does not suggest that we can easily go back to business-as-usual.
Also, our power crises will not be resolved by an increase in oil prices. Gas will still be the resource critical to resolving our power challenges.
We must also not lose sight of the environmental benefits of gas as a fuel. The prospects of a consolidated and expansionary gas industry are closer to reality, particularly with the impending National Gas Policy which we anticipate will articulate a vision for the sector, set sound policy goals, and a strategic implementation road map for medium to long-term gas infrastructure and market development going forward.
If you are asked to make recommendations to the government, what will they be?
There are many challenges to overcome. From funding of upstream gas development, resolving the Niger Delta militancy which has impacted negatively on gas supply, consolidating workable commercial and fiscal policy frameworks, resolving regulatory issues surrounding the industry, enhancing the infrastructure backbone to support the nation’s various gas development and gas-based projects. These challenges are surmountable.
We need to take a second look at our current model whereby the bulk of our gas resources are channeled towards export, whereas we face a growing demand on the domestic front. Government should provide the institutional and legal frameworks that will enable greater domestic gas supply to create multiplier effects on the economy through the power and industrial sectors. A high level of engagement with private capital and operators is the way forward, while government restricts their role to regulatory oversights.
The power sector conundrum must be resolved. The entire value chain is at a tipping point right now. Specific interventions targeted at saving the power sector from total collapse as a result of huge outstanding debt to gas producers and suppliers are required. The issue of securitisation of investments must also be addressed to ensure the existing investments do not collapse, and thereafter attract more investments.
Government should remain steadfast in its support for local content. The ultimate opportunity would come from building up and developing indigenous operations to become tomorrow leading corporations and future top players in the local, regional and international gas industry. We need to ensure transfer of technology, knowledge and skills.
To what degree is Falcon aligned to the achievement of the Local Content goals?
We are a wholly indigenous organization that strongly believes in and supports the Nigerian Local Content policy thrust. First, our employment policy mirrors this, with our jobs only going to Nigerians with appropriate skillsets. We back this by their further development through trainings both locally and internationally on a continuous basis. Expatriate engagement is solely for knowledge transfer purposes.
Our Managing Director and entire senior leadership team are Nigerians, evidencing our dedication to empowering Nigerian employees at the highest levels of our organization.
From inception, we have maintained the highest levels of Local Content in all other aspects of our operations, drawing on foreign technical expertise strictly only in areas of works and for project-related equipment which are otherwise not locally available. We take these steps to create deliberate opportunities for indigenous participation in tender exercises involving stiff competition and high capital investment and technology. We consider our Local Content commitment as one of Falcon’s significant contributions to nation-building.
Finally, do you see Falcon Corporation remaining focused on gas given the growth opportunities in diverse sectors as the nation diversifies the economy?
At Falcon Corporation, we appreciate the role of gas in engendering economic growth and diversification for our country. Gas shall continue to be a priority for us. Falcon Corporation is in the forefront of delivering natural gas to industrial and domestic markets and this will remain an integral part of our future growth plans. We remain one of the wholly indigenous players in the domestic gas supply to industries in Nigeria and we are not about to concede our position as we have worked very hard to get here. We are currently developing strategies and sustainable opportunities for increased growth in the gas sector through collaborations, partnerships and expansion. We are working hard to deepen our footprints in the gas industry, particularly within the upstream and midstream sectors.
However, we are strongly positioned for expansion into other areas of opportunity, within and outside of the energy value chain. As a dynamic and innovative organization, we have our eye on veritable investment areas that can create value in different sectors of the economy, and some of the companies in our group are already prospecting for and successfully advancing on such prospects.
Big Read |